ASAPAmazon Challenges Nvidia by Selling Its Own AI Chip 'Trainium' Externally
Amazon Web Services (AWS) is in early-stage talks to sell its in-house AI chip, Trainium, to other companies and data centers, marking a shift away from its long-standing practice of keeping the chips inside its own cloud. Reported by TechCrunch on June 18, 2026, the move would break with AWS's tradition of never selling chips externally. CEO Andy Jassy said that selling the chips as a standalone business could generate "roughly $50 billion in annual revenue."
What Amazon Is Trying to Do
AWS is weighing whether to sell Trainium, its in-house-designed AI training chip, to external customers. This represents a departure from its previous strategy of restricting the chips to use within its own cloud.
A revenue estimate has also emerged. CEO Andy Jassy said that running the chips as a standalone business could bring in roughly $50 billion in annual revenue, a figure comparable to Intel's annual sales.
The Demand Is Already Proven
Demand for Trainium sold out the moment it launched. The first batch of Trainium chips sold out immediately, and the next-generation Trainium4, which had been supply-constrained for over a year, also sold out as soon as it was released.
In other words, internal demand alone already stretches supply thin. Selling externally is an attempt to extend that strong demand beyond the cloud.
The Matchup With Nvidia
This move takes more direct aim at Nvidia. Nvidia's current annualized revenue run rate is about $326 billion, still a wide gap from AWS's estimated $50 billion.
There is context here, too. The move reads as a counter to Nvidia CEO Jensen Huang's recent remarks about a $200 billion opportunity in the "AI CPU" market, with the rivalry between the two companies now expanding beyond GPUs.
The Obstacles
External sales come with structural tension. AWS makes money not only from chip compute but also from add-on services such as storage, security, networking, and monitoring, so selling chips on their own could clash with that model.
Manufacturing constraints are also significant. Contract manufacturer TSMC is currently Nvidia's largest customer, making it hard to secure additional capacity. Amazon's head of AI chips is Peter DeSantis.
Why It Matters
This news shows that the AI infrastructure race is spreading to the chips themselves. Once cloud providers start selling chips directly, the market dynamics shift, dovetailing with demand to reduce reliance on Nvidia.
That said, given that this is still an early-stage discussion with clear manufacturing and business-model constraints, it is more accurate to read it as a "signal of pushback against Nvidia's dominance" than as a near-term shake-up.
References: TechCrunch — Amazon hopes to challenge Nvidia more directly by selling its AI chips (2026.6.18)